The Republicans in the Kentucky House finally dropped their top priority bill yesterday: HB 1, titled “AN ACT implementing the federal education opportunity program in Kentucky.”
And after reading the bill in its entirety, and looking into the federal program it references, I have some thoughts.
But first, some background.
Background of HB 1
In the federal budget reconciliation bill of 2025, a new tax credit was authorized: the so-called “Education Freedom Tax Credit” (typical Trump administration hyperbole) or the more accurate “Federal Tax Credit Scholarship Program.”
This program allows individual taxpayers to give up to $1,700 to a “scholarship granting organization” (SGO) for use by that organization to give education-related scholarships. In return, the taxpayer can take the amount they donate off the amount they owe for federal income taxes. The credit is non-refundable, though, so if the amount they donate is larger than their tax liability, they don’t get a refund for the difference.
The SGO can then give scholarships for education-related expenses to students attending either public or private schools. The SGO has to first be recognized by the state as a “qualified” SGO for that state. (Note that the SGO does not have to be located in the state to be so recognized.) Once on the state’s list, the SGO can only use money donated from that state for students in that state.
My thoughts
Perhaps it was planned, perhaps it was just coincidence – but HB 1 was filed the same day that the Kentucky Supreme Court ruled that the 2022 charter school bill was, indeed, unconstitutional.
Obviously, the federal scholarship tax credit is a sideways method to fund private schools with tax money, albeit federal and not state. And yes, people are calling out the Repubs in Frankfort for signing up for the federal program as a way to get some of that money, no matter what SCOKY may say.
But frankly, I’m not as upset about this bill as I was about the earlier bills, both the one opening the door to public funding of charter schools and the one giving $10,000 tax credits on Kentucky income taxes to anyone donating to an SGO. I don’t want public funds going to private schools, and I don’t want a 1-for-1 tax credit taken out of our state’s budget to, in effect, fund private schools.
Two things about this program make it “less bad” in my opinion:
- It’s tops out at $1,700. Considering that the average private school tuition in Kentucky is about $9,000 a year, it’s going to take a bunch of people donating to make this a viable alternative to public schools.
- It’s federal money. Obviously, I don’t like seeing federal tax dollars going to charter schools, but at least it’s not coming out of our state’s budget.
Don’t get me wrong – I still see Republicans by and large as attacking public education, or wanting to control it further, for various reasons. And HB 1 is another in a long line of bills designed to pull students out of public schools and get them into private ones.
But, even though it’s another bad bill, it’s not as bad as those other machinations.
It’s going to pass – we know that. Beshear will veto it, and the Repubs will override the veto, and it will become law. And some number of Kentuckians will write $1,700 checks to whatever SGO they can find (fly-by-night or legit), and deduct $1,700 from what they owe the IRS. And some number of Kentucky children will drop out of their public school and use a bunch of those $1,700 checks to go to some private school (fly-by-night or legit).
And my prediction is that it will be neither the death of public education, as some public school advocates predict, nor the opening of the floodgates to private school heaven, as some anti-public school crusaders dream of.
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